Both govts finalised the settlement of the compensation on the HSR project on Dec 31 last year
by NUR HANANI AZMAN / pic by MUHD AMIN NAHARUL
MALAYSIA paid S$102.8 million (RM320.27 million) to Singapore for costs incurred for the development of the Kuala Lumpur-Singapore high-speed rail (HSR) project and in relation to the extension of its suspension.
The governments of Malaysia and the Republic of Singapore finalised the settlement of the compensation with regard to the termination of the Bilateral Agreement (BA) on the HSR project on Dec 31, 2020.
“The two countries reached an amicable agreement on the amount following a verification process by the government of Malaysia.
“This amount represents a full and final settlement in relation to the termination of the BA,” Malaysia’s Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed and Singapore’s Minister for Transport said in a joint statement yesterday.
Both countries remain committed to maintaining good relations and fostering close cooperation for the mutual benefit of the peoples of the two countries.
Transportation consultant YS Chan, however, said the total cost of the HSR cancellation is beyond the compensation paid to the republic.
“What about the sunken costs by the Malaysian government and agencies, starting with the Land Public Transport Commission and later its CEO moving to take charge of HSR?
“And the loss of huge potential earnings by investors with grand plans to build vibrant ecosystems at each of the HSR stations, particularly at Bandar Malaysia,” he told The Malaysian Reserve (TMR).
“We should have proceeded to build the HSR into Singapore with both governments overseeing procurements for transparency to keep costs at the lowest possible without compromising on quality.
“The HSR alone may not be profitable, but the spin-offs could trigger a boom to the economy,” he added.
On Jan 1, 2021, Singapore’s Transport Ministry announced that the HSR project was terminated.
“PM of the Republic of Singapore Lee Hsien Loong and PM of Malaysia Tan Sri Muhyiddin Mohd Yassin met via a video conference on Dec 2, 2020, to review the status of the HSR project, including changes proposed by Malaysia to the project.
Malaysia had since allowed the HSR BA to be terminated, and compensated Singapore for costs already incurred by Singapore in fulfilling its obligations under the HSR BA in accordance with the parties’ agreement,” the ministry said in a statement.
Singapore and Malaysia signed the HSR BA in 2016.
The construction of the HSR project was subsequently suspended, from September 2018 to Dec 31, 2020, at Malaysia’s request, with the understanding that the extension of the suspension period until Dec 31, 2020, would be the final extension.
Malaysia’s suggestion to remove the assets company (AssetsCo) to manage the HSR was the primary concern that led to the project’s termination.
TMR reported that experts had been urging the government to explain various issues, especially on the removal of AssetsCo in the HSR project, as it could affect investors’ confidence in the country.
Singapore Transport Minister Ong Ye Kung said Singapore could not accept Malaysia’s proposal to remove the systems supplier and network operator of the HSR project as it constituted a “fundamental departure” from the original agreement.
According to MyHSR Corp Sdn Bhd website, an AssetsCo was responsible for designing, building, financing and maintaining all rolling stock; and designing, building, financing, operating and maintaining all rail assets like track work, power, signalling and telecommunications, among others.
It was also tasked to coordinate the system’s network capacity for operations and maintenance needs.
Read our previous report here
Read our previous report here